TITLE:
The Welfare Impact of India’s Rice Tariff from a Global Perspective —Research on Computable Local Equilibrium Model
AUTHORS:
Wenjie Li, Hongjin Xiang
KEYWORDS:
Export Tariffs, Indian Rice, Computable Local Equilibrium Model, Welfare Effect
JOURNAL NAME:
Modern Economy,
Vol.14 No.12,
December
27,
2023
ABSTRACT: Based on the literature of Francois and Hall
(1997, 2003, 2007), this article constructs a computable partial
equilibrium model and data on rice production and trade in countries
related to India’s rice export tariffs in 2022. The empirical analysis is conducted
from the industry level on the impact of India’s rice export tariffs on
rice trade, production, prices, and producer and consumer welfare in
relevant countries or regions. The following conclusions are drawn: Firstly, the
trade disruption effect of India’s imposition of rice export tariffs is
significant, with exports to other countries (regions) decreasing by over 80%; Secondly, the imposition of rice export tariffs
by India has only increased consumer prices for rice in India and China by 7.9% and 3.9%, and the cost of export tariffs
will be borne by importers; Thirdly, imposing rice export
tariffs in India does not provide substantive protection for Indian rice
consumers, as the price of Indian rice consumers has increased by 7.9%;
Fourthly, from the perspective of social net welfare indicators, India’s
imposition of rice export tariffs resulted in an increase of $471 million in
India’s social net welfare and a loss of $93.1 million in China’s social net
welfare. However, from the perspective of individual group welfare, Indian rice
producers and consumers will become the biggest victims, losing $7.04 billion
and $4.10 billion, respectively; Fifthly, looking at the entire data, India’s imposition of rice export
tariffs has a relatively small impact on China’s rice supply and consumption,
with only 3.9% change in prices for both Chinese producers and consumers.